U.S. sneakerheads might soon have some tough competition. China is becoming a substantial primary and secondary market for sneakers.
According to a recent note from Cowen Equity Research, sneaker sale and resale growth will continue to go global — with China, and Shanghai in particular, emerging as a massive frontier for the sneaker business.
Of course, China is a huge market, where sneaker fans place a premium on Nike and other American brands. The NBA is also widely popular in China, especially among young people, with many kids wanting to wear the same kicks are their favorite players. Even Chinese based sneaker companies like ANTA and Li-Ning have signed several NBA players to sneaker contracts, including Dwayne Wade and Gordon Hayward.
“Cowen is forecasting Greater China to be a significant contributor to future growth over the next five years. The group also expects Nike to grow Greater China revenues at a mid-to-high teens CAGR through FY23, reaching $11.3B with a high 30s% oper.,” analysts noted. Cowen also expects growth for Adidas in Greater China.
Cowen sees room to run for the secondary sneaker market as well. Based on recent funding rounds from resale sneaker marketplaces such as StockX and GOAT Group, Cowen expects those platforms to further invest in Asia, with a particular emphasis on China.
And, for the first time, Sneaker Con, “the greatest sneaker show on Earth” will emanate from the West Bund Art Center in Shanghai on May 18-19, for which tickets sold out in minutes, according to co-founder and CEO Alan Vinogradov. Sneaker Con has had its eye on China since 2016, says Vinogradov. “This will be the biggest show we’ve ever produced. China is going to continue to have a greater influence in the sneaker market,” he said.
The current value of the U.S. sneaker market is estimated to be around $21 billion, and Vinogradov believes the Chinese sneaker market will one day exceed the U.S. market.
“We’ve been really embraced by all angles of the market, whether it’s the culture itself which is more important than anything for us … We are bringing together the culture and community of sneakers,” said Vinogradov.
Reggie Wade is a writer for Yahoo Finance. Follow him on Twitter at @ReggieWade
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